Qureia already had told the ruling Fatah party he wants to quit once the term of his temporary government expires because of sharp disagreements with Arafat over the appointment of a security chief.
"The same government will continue from 20 to 25 days, and after that there will be a new government, with a new prime minister," Qureia said.
However, with the deadline three weeks off, there is still time to settle the differences, Palestinian officials said.
Part of the argument was over who would serve as interior minister and de facto security chief. Qureia had supported Nasser Yousef for the job, but Arafat blocked the appointment because he felt Yousef defied him by refusing to be sworn in as part of the emergency Cabinet last week.
The tension between Arafat and Qureia reflects disagreement over the amount of control Arafat would retain over Palestinian armed forces, as well as procedural and personal issues. Israel and the United States insist that Arafat hand over authority, charging that he is tainted by terrorism.
Palestinians deny that and note that Arafat is their elected president — although the term he won in a 1996 vote has formally expired.
Meanwhile, Israel and Hezbollah are closer than ever to a prisoner swap, Israel's foreign minister said Monday, as the families of Israeli captives argued among themselves and in court over the emerging deal.
Foreign Minister Silvan Shalom said the outlines of the deal with the Lebanese guerrilla group — how many prisoners, their country of origin and the criteria for their release — were being wrapped up in talks between a German mediator and Ilan Biran, director general of Israel's Defense Ministry.
"There is no doubt that the picture today is that the deal is closer than ever," Shalom told Israel's Army Radio.
The German-brokered prisoner exchange would involve trading Israeli businessman Elhanan Tannenbaum and the bodies of three Israeli soldiers for several hundred Arab prisoners, including Palestinians.
Tannenbaum was kidnapped in October 2000 on a trip to the United Arab Emirates, and the three soldiers were abducted along the Israeli-Lebanese border in 2000.
The Tannenbaum family has been trying to suppress information surrounding his capture and alleged shady business dealings. The family appealed to the Supreme Court on Monday to try to overturn a lower court's ruling to lift a gag order on the details of his capture. A decision was expected later Monday.
Prime Minister Ariel Sharon said in an interview with The Jerusalem Post that if the rumors about Tannenbaum turned out to be true he would stand trial in Israel.
In addition, a debate rages in Israel over whether Lebanese guerrilla leader Mustafa Dirani should be released, without Israel getting at least information about Ron Arad, an Israeli airman who was shot down over Lebanon in 1986.
Dirani was one of Arad's captors, and was snatched by Israeli commandos in 1994, to be used as a bargaining chip to secure the airman's release.
Referring to the debate, Shalom said: "Every decision that the government will make either way will be publicly criticized."
Sharon told the Jerusalem Post that a deal to release Tannenbaum would not hurt Israel's ability to weave together a separate deal on Arad. He said he had ordered the security establishment to investigate recent media reports that Arad was being held in a prison near Tehran.
"If the prisoner exchange would make it impossible to bring about the release of one of our missing soldiers, it would be different, but we tried for many years to find Ron Arad and — despite all our intelligence capabilities — we didn't succeed," Sharon said.
At the same time, Israel's three-day military operation in a Gaza Strip refugee camp has left about 400 Palestinian families homeless, local officials said Monday, as the interim Palestinian Cabinet prepared to meet in the West Bank.
The U.N. Relief and Works Agency, which cares for refugees, initially said that about 1,500 Palestinians were left homeless in the raid, the largest-scale demolition of houses in a single operation in Gaza in the past three years of fighting. After further checks, the agency revised the number to 1,240.
"We have had very, very significant damage to the refugee camp," Peter Hansen, the commissioner general of UNRWA, said after inspecting the damage Sunday. "Many houses, maybe as many as 120, have been completely demolished."
A leading American conservative, Richard Perle, says Israel missed a major diplomatic opportunity last year when President Bush called for separate Jewish and Palestinian states on June 24, 2002.
"This speech was very important, and Israel's leadership should have grabbed it with both hands," Perle told Haaretz newspaper.
Instead, said the longtime Pentagon adviser, Israel equivocated, allowing the current "road map" peace plan — which Perle opposes — to materialize. Had seized the opportunity, all the pressure could have been placed on the Palestinians, Perle said.